Registration Of Individuals For Income Tax Purposes

At the beginning of the 2011 tax year, employers began registering all employees for income tax purposes; this requirement was relayed to employers through Easyfile and marketing campaigns. Employees were given the instruction to go to SARS and register; in some instances successful and in others not.

The simple reason for this is that section 67 prohibits the registration of an employee deriving income solely from standard employment, which relates to SITE tax only.Although the abolishment of SITE tax will take place over the next three years, registration criteria are still the same.

The question is why are we registering every employee, when the act does not make provision for it and, secondly, with the talk of increasing the earning requirements for completion of a tax return from R60 000 to R120 000.It may be from an international perspective that having the current 3,5 million taxpayers versus our population depicts the incorrect picture.Whatever the reason, employers are concerned that they will not be able to resolve the administration problems they currently have in completing tax numbers for employees.

Bulk registration has been completed by the employers.However, accessing the results has proven to be problematical: employees no longer employed by the employer requesting information are unable to access information when the employee has been ‘registered’ by the new employer;only single downloads per employee are capable; the system will be functional only by March 2011 and the list goes on.However, you have all received ITA88s.For more on this, go to www.Linkedin.com under the South African Payroll Association discussions.

In the last two years, a significant trend has been established with regard to employers’ concentration on administration versus the legal requirements in terms of payroll taxes and the resultant effect is that concerns have been raised by employers that they will not be able to submit their annual reconciliation due to the outstanding income tax reference numbers.

Employers should take note of the following extracts to the act:Para 14 of the fourth schedule with effect from 1 March 2010, states (1) every employer shall in respect of each employee maintain a record showing- (d) the income tax reference number of that employee where that employee is registered as a taxpayer in terms of section 67.

The provisions of section 4(iv) have been amended from 1 March 2010 to allow SARS to disclose to an employer the following:-the income tax reference number, physical or postal address of that employee.This is to enable the employer to fulfill his obligations in terms of the act.

Accordingly, my advice to all employers that are uncertain or concerned if they will have all the required information to complete their annual reconciliation by the due date should make use of the provisions of section 4(iv) and request such info from SARS, obviously in writing with an acknowledgement.By the due date, if such information has not been furnished, the employer is to assume that the employee is not registered in terms of section 67 of the act, as the requirement of Para 14 relates only to where the employee is registered.

In terms of interpretation of the relevant statutes and by following the prescribed process, SARS will not be placed in a difficult position to impose any penalty for late submission, based on rejection as a result of ‘missing’ tax numbers.

WHY REGISTER WITH SAIT?

Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

MINIMUM REQUIREMENTS TO REGISTER

The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.